CHANCELLOR George Osborne has vowed to “put the power into the Northern Powerhouse” as he confirmed that negotiations were ongoing over devolution deals for both Leeds and Sheffield city regions.

He said these talks could deliver “far-reaching devolution of power in return for the creation of directly-elected mayors”.

Announcing his budget today he also confirmed that an agreement had been reached with 10 councils in Greater Manchester to devolve further powers to the city - including decision making over transport and children’s services.

The Yorkshire Post reported today that the authorities in the Leeds City Region have proposed being given new powers to raise money from business to pay for major infrastructure schemes and to be able to offer developers incentives to get projects started.

In the first budget of the newly elected Conservative Government Osborne pledged to create a “higher wage, lower tax, lower welfare” Britain.

The Chancellor pointed to the Greek crisis as evidence that a “bold new settlement” is needed, saying Britain was still “borrowing too much and spending too much”.

“This is the new settlement from a one nation government,” he said. “This is a big budget for a country with big ambitions.”

Mr Osborne said the UK economy today is “fundamentally stronger than it was five years ago”, with living standards rising strongly.

He said higher tax receipts meant he could implement a “smoother” path to recording a surplus in the government finances, but stressed that he would not back away from tackling the deficit.

“You only have to look at the crisis unfolding in Greece as I speak to realise that if a country’s not in control of its borrowing, the borrowing takes control of the country,” Mr Osborne said.

“A Budget that sets out a plan for Britain for the next five years to keep moving us from a low-wage, high-tax, high-welfare economy; to the higher-wage, lower-tax, lower-welfare country we intend to create.

“This is the new settlement. From a one-nation government, this is a one-nation Budget that takes the necessary steps and follows a sensible path for the benefit of the whole of the United Kingdom.”

Mr Osborne said the Government would record an absolute surplus of 0.5 per cent of national income in 2019-20 - a year later than previously predicted.

He stressed that no year would see departmental cuts as deep as those imposed in the last parliament.

“Many difficult but necessary decisions are required to save money and this will be done with moderation but determination,” Mr Osborne said.

“This is a one nation Government that does the best thing for the economy and the right thing for the country.”

The Chancellor said £37 billion of fiscal consolidation was needed during this parliament, including £12 billion of welfare cuts. He confirmed that he was looking to raise another £5 billion from cracking down on tax avoidance.

Acknowledging a well-received Labour policy from the election campaign, Mr Osborne announced that permanent non-dom tax status was being abolished.

“British people should pay British taxes in Britain, and now they will,” he said.